Lake County to get some money back from loan given to now defunct Core Systems

Lake County has agreed to recoup what it could from a $150,000 loan given in March 2012 to Painesville-based Core Systems LLC.

Commissioners on Thursday approved an agreement with Extrusion Acquisition LLC, which offered to purchase the secured interest on the loan for $100,000.

The original loan to Core Systems came from the county's revolving loan fund, created in 2011 with federal Community Development Block Grant Funds as seed money.

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The revolving loan fund is aimed at spurring economic development and to assist businesses that might have trouble gaining access to capital dollars.

At the time Core received the loan the company had been slated to create 25 jobs, but officials acknowledged there is always an element of risk when providing these types of loans. Core Systems went out of business in February and about 400 jobs were lost when the manufacturing business closed.

Martin Gareau, Lake County Port Authority's director of finance, said at the time of Core's announcement that the company had been doing well and exceeded the number of jobs created and specified in the loan terms.

Core officials said when announcing the decision to close that they had to cease operations because one of its large clients pulled their business.

Commissioner Daniel P. Troy said about $10,000 had been paid back on the loan since it had been issued.

Troy said the general feeling on taking a $40,000 loss was that this would be the best deal because the county was in line behind the state and potentially other creditors seeking recovery on Core's assets.

"We could have gotten the equipment and tried to sell off that equipment, but we're not in the business," Troy said. "What would we have gotten on that?"

He noted that Core had been on time making payments and the company had been doing well so it seemed like a good investment for the county to make the loan.

Ideally, the company that takes over Core's assets will evolve into something that will restore manufacturing to the facility in Painesville, Troy said.

In the meantime, commissioners plan to reinvest the $100,000 back into the county's Community Development Block Grant Economic Development Loan Program.